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Meet Your Chapter Staff January 13, To provide a better user experience, EAA uses cookies. When considering using a Web-based application for transmission of passenger information instead of the current program, costs and uncertainties of this alternative are mostly addressed — Lastly though, in terms of Evaluating Different Aircraft Weight Thresholds, the RIA argues that lower weight requirements are less inclusive and the 12, pound MTOW in proposed rule mitigates potential security risk and damage of more large aircraft — Since the exact risk of attack we face at the present moment and our exact willingness to pay for a program that decreases said risk is highly uncertain, this method seems like an adequate way to establish the baseline.
Annualized costs include opportunity costs to passengers. All possible expenditures are explained and monetized. The RIA gives a detailed quantification of the impact of LASP requirements on existing and new operators, both aircraft and airport, and expenditures that will be incurred by TSA itself. For instance, newly regulated aircraft operators incur "expenses associated with designating security coordinators and ensuring they meet training requirements, subjecting flight crews to STAs, and controlling access to weapons" 52—3.
In addition, TSA would incur costs to reach out to covered operators during the implementation stage, "to process security programs and profiles submitted by It's not analyzed, but comment is invited on some specific prices that may change. This could have been done based on previous regulations of airline security. Further, the costs of each aircraft operator contracting with an auditor approved by TSA are based on an assumption that TSA-approved auditors "would charge prices comparable to those currently charged by FAA safety inspectors.
It is impressive that the RIA considers passenger opportunity costs. According to TSA, passenger opportunity costs derive from two distinct events. The first arises from the "requirement for passengers to provide personal information to the aircraft operator preliminary to the watch list matching process. While TSA's quantification of the effects of delays is outstanding, it does not anticipate how passengers may react to increased waiting times. Explanation of possible producer responses is also lacking.
A Sensitivity Analysis, provided in appendix A, gives several areas of uncertainty in the cost estimates. For instance, the "most significant source of uncertainty in the cost estimates is the actual number of annual operations conducted by aircraft subject to the proposed rule" — To capture this uncertainty, a random variable for annual flights was created and TSA ran a Monte Carlo simulation. TSA also simulated the "variability in three major cost elements which contribute to the total program costs discussed above.
Some areas of uncertainty aren't recognized, however such as some assumptions made in the analysis. In some scenarios, yes. Given the approaches considered and the potential costs of choosing alternative approaches, it seems reasonable to think that the RIA has identified an approach that may in some scenarios maximize net benefits. Yes, in break-even analysis for the main regulation and in the appendix for the alternatives. The direct costs are well assessed and incidence described in multiple charts and graphs, but some possible indirect costs due to changes in prices or substitution across modes are not considered.
The exception is opportunity cost to passengers, which is one indirect cost considered. The RIA's Benefits section gives a breakdown of how each aspect of the LASP will increase aviation security and consolidate the regulatory regimen 34— Specific assessment of the parties who will receive these benefits is not given, although it is assumed that the general welfare of the United States and government officials will share in these benefits, respectively.
The Introduction section of the proposed rule implies that it used the RIA to establish the higher weight thresholds of LASP because "incidents involving heavier aircrafts have the potential to lead to greater damages and loss of life under one of the scenarios studied in [their] regulatory impact analysis" 64— Also, given the extensive calculations of marginal cost compliance for each participant and carefully calculated benefits of the break even analysis that TSA found in this RIA, it would be surprising if the TSA did not use the results to make major decisions.
TSA calculates the costs of multiple alternatives and claims that the options it chose are efficient and effective when compared to the other options considered in the RIA. The various year annual estimated compliance cost charts can be thought of as data to gauge actual against estimated costs, though the RIA does not explicitly state that TSA will do so.
Also, break-even analysis using cost data could be performed with these data. Department of Homeland Security. Related Content Books. Jerry Ellig. The Mercatus Center. James Broughel. Public Comments. How verifiable are the data used in the analysis? How verifiable are the models and assumptions used in the analysis?
Was the analysis comprehensible to an informed layperson? How well does the analysis identify the desired outcomes and demonstrate that the regulation will achieve them? Does the analysis identify how these outcomes are to be measured? Does the analysis provide a coherent and testable theory showing how the regulation will produce the desired outcomes?
Does the analysis present credible empirical support for the theory? Does the analysis adequately assess uncertainty about the outcomes? How well does the analysis identify and demonstrate the existence of a market failure or other systemic problem the regulation is supposed to solve? Does the analysis identify a market failure or other systemic problem? Does the analysis outline a coherent and testable theory that explains why the problem associated with the outcome above is systemic rather than anecdotal?
Does the analysis adequately assess uncertainty about the existence or size of the problem? Does the analysis enumerate other alternatives to address the problem?
Is the range of alternatives considered narrow e. Does the analysis evaluate how alternative approaches would affect the amount of the outcome achieved? Does the analysis adequately address the baseline? That is, what the state of the world is likely to be in the absence of federal intervention not just now but in the future? Does the analysis identify and quantify incremental costs of all alternatives considered?
Does the analysis identify all expenditures likely to arise as a result of the regulation? Does the analysis identify how the regulation would likely affect the prices of goods and services? Does the analysis examine costs that stem from changes in human behavior as consumers and producers respond to the regulation? Does the analysis identify the alternative that maximizes net benefits? Does the analysis identify the cost-effectiveness of each alternative considered?
Does the analysis identify all parties who would bear costs and assess the incidence of costs? Does the analysis identify all parties who would receive benefits and assess the incidence of benefits?
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